Not all rainmakers are equal — and the kind this blue-blooded firm boasts may bring in fees but not necessarily the kind upon which enduring law firms are built. Continue reading

Heenan Blaikie is dissolving, marking the largest closing of a Canadian law firm, because of rivalries and inter-office conflicts, particularly between the firm’s Toronto and Montreal offices, said Heenan, a founding partner who stepped down as chairman in 2012.

“It’s so unnecessary. That’s the part that upsets me,” Heenan, 78, told The Gazette during an interview at his downtown Montreal home.

Media reports have suggested that the Canadian legal powerhouse was facing financial hardships amid claims that income per partner had recently dropped 10 to 15%. The loss in earnings accelerated the departure this winter of senior partners, who took their clients with them, depriving the firm of needed revenues.

Heenan said the firm — home to a coterie of leading Canadian politicans, including two former prime ministers — had a near-record billing of $35-million for the month of December 2013.

“The month of December … was probably one of our best months ever.” said Heenan, who quit working as a partner at the firm more than a decade ago.

“We had a book of business last year of $222 million with a profit of about $75 million.

“Financially, we were doing fine. But everyone felt they should do a little better, or it was the fault of this office or that office. It was that type of clash. It is very sad. When you’ve got a national firm and people start blaming the other then you get the fights between the offices. And that’s what eventually leads to the decision, well perhaps we shouldn’t all stay together.”

On Thursday, media reports noted that Heenan Blaikie’s smaller Quebec offices in Trois Rivières and Sherbrooke were performing well financially, and are expected to continue operations. This as the firm’s teams in Toronto and Calgary were holding merger talks with a U.S. giant.

DLA Piper told the Financial Post Thursday that it is in talks to establish its first office in Canada, staffed by former lawyers of Heenan Blaikie.

And in Vancouver, former Heenan Blaikie lawyers said they would be setting up a new firm under a different name with Roy Heenan as an adviser.

Everyone felt they should do a little better, or it was the fault of this office or that office

Heenan Blaikie announced Wednesday night that partners would be shutting down the legal powerhouse, where former prime ministers Pierre Trudeau and Jean Chrétien, along with former Quebec Premier Pierre-Marc Johnson worked as lawyers.

“This decision follows an in-depth analysis of the available restructuring options in the current context of Canada’s legal services market,” the firm said in a statement.

Co-founder Peter Blaikie, who ceased being a partner at the firm 20 years ago, said in a statement that he was “deeply saddened to learn” of the firm’s dissolution.

Heenan said the disagreements stemmed partly from rivalries between the offices and between practitioners of the different specialties within the firm, including employment and labour law.

“Sometimes the rivalries are between the different types of law. (It was said) ‘If we were only doing this we would be more profitable.’ And this type of rivalry caused problems,” he explained.

“We did a lot of public policy which is why we had (former prime ministers) Pierre Trudeau, Jean Chrétien and (former Quebec premier Pierre-Marc Johnson). But as you can see, the squabbles between regions often cause problems.”

Heenan was one of three original partners who founded the firm in 1973. Donald Johnston and Peter Blaikie had just left the law firm Stikeman Elliott LLP, while Heenan said he was doing labour and litigation at another large firm. Heenan recalled how Blaikie and Johnston (who later had his name removed when he became a Liberal MP in 1978) asked him to join them in setting up the new venture.

Although they were lawyers, they eschewed drawing up a formal contract. Instead, they based their partnership on good will.

“It became eventually Johnston, Heenan Blaikie on a handshake,” he recalled. ”Very ironic (for lawyers) It was founded on trust.”

Lawyer Guy Dufour joined the three as well, helping grow the firm from four to 500 lawyers.

Heenan described Trudeau’s arrival in 1984 — when the firm had 44 lawyers in Quebec — as a catalyst for that growth.

The firm represented Trudeau because Johnston (a former president of the Liberal Party of Canada) was a friend of the late prime minister. At the time, Blaikie was president of the Conservative Party, Heenan said.

“When Pierre announced that he was thinking of stepping down, he was a friend of ours and he had offers from every firm in town,” he recalled. “I and (the firm’s managing partner at the time) went to see Pierre and we said “Why don’t’ you come and work for us? You’d be amongst friends.”

“He (Trudeau) was not going to be a corporate lawyer in the traditional sense. We were an ideas place.

“We broke the barrier in the sense that when we started there were very few firms that had English, French and Jewish lawyers. And Pierre obviously liked that.”

Heenan said the firm was more concerned at the time with building a happy work environment than earning the highest possible salaries for its lawyers.

“We were one of the happiest law firms,” he said. “In fact, I’m getting dozens of messages from former partner who said how much they enjoyed working at the firm.